Q. The example uses the following data for 2007 : PG = wholesale price of natural gas ($ per 1000 cubic feet) PO = average price of a barrel of crude oil = $50, Production and consumption of natural gas were 23 trillion cubic feet, Supply of Natural Gas (trillion of cubic feet): QS = 15.90 + 0.72PG + 0.05PO Demand for Natural Gas (trillion of cubic feet) QD = 0.02 – 1.8 PG + 0.69PO a. Find the equilibrium price for natural gas b. Suppose the regulated price of gas were $7.00 per thousand cubic feet instead of $3.00. How much excess demand or supply would there have been?
Q. The example uses the following data for 2007 : PG = wholesale price of natural gas ($ per 1000 cubic feet) PO = average price of a barrel of crude oil = $50, Production and consumption of natural gas were 23 trillion cubic feet, Supply of Natural Gas (trillion of cubic feet): QS = 15.90 + 0.72PG + 0.05PO Demand for Natural Gas (trillion of cubic feet) QD = 0.02 – 1.8 PG + 0.69PO a. Find the equilibrium price for natural gas b. Suppose the regulated price of gas were $7.00 per thousand cubic feet instead of $3.00. How much excess demand or supply would there have been?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
![Q. The example uses the following data for 2007 :
PG = wholesale price of natural gas ($ per 1000
%3D
cubic feet)
PO = average price of a barrel of crude oil = $50,
Production and consumption of natural gas were
23 trillion cubic feet,
Supply of Natural Gas (trillion of cubic feet): QS =
15.90 + 0.72PG + 0.05PO
Demand for Natural Gas (trillion of cubic feet) QD
= 0.02 – 1.8 PG + 0.69PO
a. Find the equilibrium price for natural gas
b. Suppose the regulated price of gas were $7.00
per thousand cubic feet instead of $3.0O. How
much excess demand or supply would there have
been?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F813bc2cb-8d5b-470e-9931-969f6b4283c7%2Fb5a19fb1-df22-4626-b630-a0964c144142%2Fe8twgdb_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Q. The example uses the following data for 2007 :
PG = wholesale price of natural gas ($ per 1000
%3D
cubic feet)
PO = average price of a barrel of crude oil = $50,
Production and consumption of natural gas were
23 trillion cubic feet,
Supply of Natural Gas (trillion of cubic feet): QS =
15.90 + 0.72PG + 0.05PO
Demand for Natural Gas (trillion of cubic feet) QD
= 0.02 – 1.8 PG + 0.69PO
a. Find the equilibrium price for natural gas
b. Suppose the regulated price of gas were $7.00
per thousand cubic feet instead of $3.0O. How
much excess demand or supply would there have
been?
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 2 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
![ENGR.ECONOMIC ANALYSIS](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9780190931919/9780190931919_smallCoverImage.gif)
![Principles of Economics (12th Edition)](https://www.bartleby.com/isbn_cover_images/9780134078779/9780134078779_smallCoverImage.gif)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
![Engineering Economy (17th Edition)](https://www.bartleby.com/isbn_cover_images/9780134870069/9780134870069_smallCoverImage.gif)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
![ENGR.ECONOMIC ANALYSIS](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9780190931919/9780190931919_smallCoverImage.gif)
![Principles of Economics (12th Edition)](https://www.bartleby.com/isbn_cover_images/9780134078779/9780134078779_smallCoverImage.gif)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
![Engineering Economy (17th Edition)](https://www.bartleby.com/isbn_cover_images/9780134870069/9780134870069_smallCoverImage.gif)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
![Principles of Economics (MindTap Course List)](https://www.bartleby.com/isbn_cover_images/9781305585126/9781305585126_smallCoverImage.gif)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
![Managerial Economics: A Problem Solving Approach](https://www.bartleby.com/isbn_cover_images/9781337106665/9781337106665_smallCoverImage.gif)
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
![Managerial Economics & Business Strategy (Mcgraw-…](https://www.bartleby.com/isbn_cover_images/9781259290619/9781259290619_smallCoverImage.gif)
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education